According to the World Bureau of Metal Statistics, the global aluminum market was in oversupply by some 1.23 million tonnes in the first nine months of 2013, following a surplus of 539,000 tonnes for the whole of 2012. It’s this quantity of metal above ground which drove prices this week to their lowest value since mid-2009.
The $2bn-a-year cobalt market is in the midst of an upheaval. After more than two decades during which the cobalt industry has used the price assessments of journalists at Metal Bulletin as a benchmark for transactions, the market is now shifting to adopt the London Metal Exchange contract.
While interest in the LME contract is growing, the cobalt market, much of which has relied on Metal Bulletin’s twice-weekly price assessments to settle its long-term contracts, remains divided on pricing mechanisms.
Copper fell 2.3% on Wednesdays to $3.1595 a pound on the Comex division of the New York Mercantile Exchange, the lowest price since July 31. So far this year, the price declined 12 percent.
Copper has been sliding since Tuesday after China’s Third Plenum — a four-day meeting that sets government economic policy for the world’s second – largest economy—released a broad blueprint calling for markets to play a more “decisive” role in economic matters.
From aluminum to copper, prices of almost all metals have been in decline since the beginning of the year, plagued by stocks and surpluses. But two of them have moved in the opposite direction: lead and zinc prices are on the rise, a trend that is unique among metals.
70% of worldwide lead comes from batteries recycling. Since the financial crisis and the impact it had on western countries new car sales, recycled lead quantities have dropped. At the same time, production of primary lead also decreased.
The International Lead and Zinc Study Group expects that there will be a small 22,000 tonnes surplus in the global market for refined lead metal in 2013. In 2014, the market is expected to be in deficit for the first time since 2009 with the extent of the shortage estimated at 23,000 tonnes.
Nickel stockpiles tracked by the London Metal Exchange, which have surged 71 percent this year, reached an all-time high of 239,958 metric tons yesterday. This is a market in chronic oversupply resulting from systemic over-production.
Commodity markets volatility from coal to nickel and tin, which climbed to the highest level in more than six months after the Indonesian government restricted exports, is the direct result of Indonesia’s attempts to ease a record current account deficit by boosting revenue from its mining industry.
Tin price on the Kuala Lumpur Tin Market (KLTM) closed slightly higher with a US$50 increase to US$22,950 a tonne today on renewed buying support. The price increase was in tandem with the rise on the London Metal Exchange (LME), where tin price rose by US$170 to settle at US$22,995 a tonne.
Platts upped its hot-rolled coil assessment Tuesday from $645-655/st to $655-665/st and concurrently moved cold-rolled from $750-760/st to $760-770/st. All prices are normalized to a Midwest (Indiana) ex-works basis.
Mill discipline appears to be pushing flat-rolled steel pricing up in the US, though at least some market sources said Tuesday they fear that a late-year run-up could invite a glut of imports in the first quarter.
Nickel jumped to a nine-week high in London as investors purchased the metal to close out bets on mounting concern that ore exports will be halted next year from Indonesia, the world’s largest producer.
In spite of the delivery of new bulk carriers ordered during the shipping golden age, dry shippers bulk freight rates are rising due to Chinese iron ore purchases. The shipowners are back on the bulk carriers spot market to meet the increase in Chinese steel production, the highest in three years, which is driving the biggest jump in shipping rates since 2009.
This increase in steel output has reduced the iron ore stock which fell to its lowest level since 2007. The number of Capesize vessels in service, the largest bulk carriers, increased by 51% in September to 124 from August according to a study by Morgan Stanley. More than 90% were intended for China.
MEPS just published its steel forecast reports to 2017. One report is available for each region of the world (European Union, North America and Asia) and the last one is a world average. MEPS expects a recovery in global steel price over the next three years.
With 2013 being the low point in the steel cycle and despite a number of difficulties to overcome, consumption should begin to pick up in 2014 as the economic climate improves.